Posted on 14 Oct 2022
Total stocks of the five major carbon steel products held by Chinese steel traders reversed down during October 8-13, the week following the country's National Day holiday, Mysteel's latest weekly survey shows, mainly thanks to a revival in steel consumption after the break. Yet behind the decline, concerns among market participants about future steel demand are growing, as the recent upsurge in COVID-19 infections nationwide is clouding the outlook, sources said.
The five major finished steel products comprise rebar, wire rod, medium plate, hot-rolled coil (HRC) and cold-rolled coil. Their total inventories at trading houses in 132 Chinese cities sampled by Mysteel declined by 2.1% or 371,900 tonnes on week to reach 17.7 million tonnes as of October 13, according to Mysteel's data.
The latest survey showed that stocks of rebar fell at the fastest pace, down 302,600 tonnes on week to 7.1 million tonnes and accounting for 81.4% of the total drop in stocks.
On the other hand, lower output among steel mills also contributed to the decline in stocks, with production of the five steel items among the 184 Chinese steelmakers Mysteel follows reversing down by 0.2% or 22,500 tonnes on week to 9.6 million tonnes over October 6-12.
However, market sentiment has turned cautious again, with some industry watchers becoming doubtful about the pace of destocking due to pandemic disruptions. Chinese finished steel prices are also showing signs of softening.
For example, as of October 12 the country's national price of HRB400E 20mm dia rebar under Mysteel's assessment, had dipped by Yuan 51/tonne ($7.1/t) from that on October 10 to Yuan 4,150/t including the 13% VAT, after gaining Yuan 31/t between September 30 and October 10.
Meanwhile, steel demand from domestic end-users after the holiday is being impeded by resurgent COVID-19 cases across the country, sources said, with the trading volume of rebar, wire rod and bar-in-coil among the 237 trading houses Mysteel surveys reaching an average of 160,988 tonnes/day during October 8-12, a level regarded as low as autumn is usually a peak season for steel use.
Steel inventories held by traders in Mysteel's former smaller sample across just 35 cities had thinned by 191,300 tonnes or 1.7% on week to 10.8 million tonnes by October 13.
Source:Argus Media
